FACTORING Definition

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FACTORING is the practice of buying debt at a discount, e.g., if somebody owes you $10,000 payable within a year, a factoring lender may pay you $9,000 for the debt. You receive $9,000 cash quickly, but at the cost of the $1,000 discount.

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COST OF REVENUE see COST OF GOODS SOLD.

REVERSE REPURCHASE AGREEMENT (reverse repo) is the opposite of a repo in that it is the purchase of securities (usually government debt) tied to an agreement to sell the security back at a later date at a higher price. Reverse repos are normally short term agreements; primarily on an overnight basis.

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